Knowledge Base

Named Peril:

• Coverage: Only protects against specific perils explicitly listed in the policy. These typically include common risks like fire, theft, windstorm, hail, vandalism, and explosions.
• Benefit: Typically lower premiums due to limited coverage scope.
• Drawback: You might not be covered for unexpected events not listed in the policy, leaving you financially responsible. Requires careful scrutiny of the listed perils to ensure they align with your specific risks.
• Burden of Proof: The burden of proving that a named peril caused the damage falls on the policyholder.

Open Peril (or All Peril):

• Coverage: Protects against all perils except those explicitly excluded in the policy. This broader coverage encompasses all potential risks unless specifically stated as exclusions.
• Benefit: Offers greater peace of mind, knowing you're protected against most unexpected events.
• Drawback: Typically higher premiums due to the wider coverage scope. Carefully review exclusions to understand potential gaps in coverage.
• Burden of Proof: The burden of proving that an excluded peril caused the damage falls on the insurance company.

Common Named Perils

While the exact list of named perils can vary slightly depending on your insurance company and location, some of the most common named perils covered in homeowners insurance policies include:

Basic Form (HO-1 and DP-1):

• Fire and lightning: Damage caused directly by fire or lightning, including smoke damage.
• Windstorm and hail: Damage caused by wind exceeding a certain speed or hail of a specific size.
• Explosion: Damage caused by an explosion, such as a gas leak or boiler malfunction.
• Ice and snow: Damage caused by the weight of accumulated ice or snow, such as roof collapse.
• Volcanic eruption: Damage caused by volcanic ash or lava flow (coverage may vary depending on location).
• Theft: Loss or damage to your belongings due to theft or attempted theft.
• Vandalism: Malicious damage to your property by someone other than you.
• Riot or civil commotion: Damage caused by a riot or civil unrest.
• Aircraft or vehicle: Damage caused by an aircraft or vehicle impacting your property.
• Falling objects: Damage caused by an object falling onto your property, such as a tree branch or debris.

Broad Form (HO-2 and DP-2):

Typically includes everything in the Basic Form above, plus:

• Accidental discharge or overflow of water or steam: Damage caused by a burst pipe, appliance malfunction, or other water discharge issue.
• Sudden and accidental tearing, cracking, burning, or bulging: Damage caused by sudden, unforeseen events to structures or appliances.
• Freezing: Damage caused by freezing of plumbing systems or heating equipment.
• Weight of ice, snow, or sleet: Damage caused by the weight of accumulated ice, snow, or sleet on covered structures.

Common Open Peril Exclusions

Open peril homeowners insurance against all perils except those explicitly excluded. Here are some common open peril exclusions you might encounter:

Natural Disasters:

• Floods: Flood damage is typically excluded in standard open peril policies. You'll need separate flood insurance for this coverage.
• Earthquakes: Earthquake damage is another common exclusion, requiring separate earthquake insurance for protection.
• Sinkholes: Damage caused by sinkholes typically falls under the earthquake exclusion or might have a separate exclusion clause.
• Landslides: Landslide damage might be excluded or have specific limitations depending on your policy and location.

Man-Made Events:

• War and terrorism: Open peril policies typically exclude damage caused by war, terrorism, or related activities.
• Nuclear hazards: Radiation or contamination resulting from nuclear incidents is usually excluded.
• Government action: Confiscation or damage to your property by government authorities might be excluded.
• Intentional acts: Damage intentionally caused by you or someone acting on your behalf is excluded.
• Mechanical Breakdown: Wear and tear, mechanical breakdowns, and maintenance issues are usually excluded.
• Pollution: Damage caused by pollution you or others release is often excluded.

Other Exclusions:

• Mold and fungus: Mold and mildew damage might have specific exclusions or limitations.
• Insect and vermin infestation: Damage caused by pests like termites or rodents is likely excluded.
• Normal wear and tear: Gradual deterioration due to everyday use is typically not covered.
• Power outages: Loss or damage caused by power outages might be excluded or have limited coverage.
• Business use: Damage related to business activities conducted on your property might be excluded.